A leak in the roof ruined part of the data needed to complete the high-low method calculation. The high point related to 50 units indicates a total cost of $1,840. Total fixed costs are estimated at $1,200. The plans are to produce 60 units in the current month. How much is the variable cost per unit?
A) $11.20
B) $12.80
C) $20.00
D) $64.00

Question

Quizplus · Accepted Answer

Total Cost (at high) - fixed costs = Total Variable cost (high); $1,840 - $1,200 = $640; Unit variable cost = Total variable cost (high) ÷ units (high) = $640 ÷ 50 = $12.80

A Leak in the Roof Ruined Part of the Data